Bitcoin Pushes Through $50K for First Time Since Late 2021
Bitcoin has surged past $50,000 for the first time since late 2021, marking a significant recovery from its plunge below $40,000 in the initial days following the launch of spot ETFs.
CoinDesk's Bitcoin price index, which tracks price data on multiple exchanges, surpassed $50K on February 12.
The bitcoin bull market, which began in January 2023, entered the FOMO (Fear of Missing Out) stage with this breakout.
Despite billions of dollars flowing into new spot ETFs, investor attention was initially focused on the billions exiting the high-fee Grayscale Bitcoin Trust (GBTC), causing bitcoin to drop as low as $38,500 just days after the ETFs began trading.
Recent weeks have seen a slowdown in GBTC outflows, while inflows into new ETFs have remained strong. On February 8, Grayscale shed 1,850 bitcoins, while the other nine ETFs added nearly 11,000 tokens. On February 9, Grayscale lost 2,252 coins, while the ETFs added more than 13,000. For perspective, only 900 newly mined bitcoins enter the market each day, a number set to halve to 450 per day with the upcoming Bitcoin halving in April.
Crypto Winter Ends
Bitcoin's price peaked at about $69,000 in November 2021, but 2022 was disastrous due to the implosion of the Terra ecosystem, the collapse of crypto exchange FTX, and other high-profile industry failures. Bitcoin closed 2022 at just above $16,000, down about 75% from its all-time high.
While 2023 saw a major bull market for crypto, bitcoin's performance was relatively subdued until the year's final quarter. Confidence grew that the SEC would approve spot bitcoin ETFs in early 2024, driving bitcoin's price up nearly 60% in the last three months of 2023, closing the year above $42,000.
Bitcoin's recent surge past $50K signifies renewed investor confidence and marks a significant milestone in its recovery from the lows of 2022.
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